By: Ask Bill
Submitted: 2010-12-02 22:12:41 | Word Count: 662
Insolvency is one of many ways for you to be rid of your existing debts. By filing for insolvency you may be able to stop your creditors from continuously harassing you to repay your debts. Usually creditors may pursue you with all means possible to ensure that you make all due payments and they can sometimes be annoying. When that happens logically you might think about switching your phone off or in worse cases, change your phone number. When it comes to situations like these, your creditor might decide to take legal action against you. This is why many people opt to file for insolvency so that they can put a stop to it all. However, if you have yet to file for insolvency a credit card summons might be a serious thing that you need to take into consideration.
If you have already filed for insolvency, generally you may be able to stop any legal action taken against you and that includes credit card summons. The automatic stay in insolvency procedures allows the court to effectively end any legal actions on the part of your creditors. Depending on the type of bankruptcy you are eligible to file, your debt may be discharged or you may restructure your repayment plan so that you may be able to pay it off. Of course, the insolvency judge may need to approve your petition prior to ordering a stay. However, it is advisable that you consult with an attorney regarding the matter as there may be some lawsuits or civil actions that may not be thwarted by insolvency filing such as federal loans, tax cases, college loans, child support and criminal lawsuits.
When it comes to bankruptcy and credit cards creditors’ legal actions there are always ways to resolve the issue whether in or out of court. However, once you are served with a summons you may be required to respond to it. Some attorneys might advice you to ignore such summons especially if the creditor is already listed in your insolvency filing. However, this may depend on whether the insolvency you filed was prior to or after you have been summoned to appear in court by your creditors. If you have yet to file for bankruptcy you might find that your creditors may be more likely to agree to an out of courts settlement because any lawsuit is as expensive for them as it may be for you. So it may be a good idea for you to negotiate a debt reduction or settlement with your creditors once you are served with a summons.
You may even propose to enroll into a credit card help program to enable you to repay your creditors without having to go through all the legalities of a lawsuit. You may need to state in your correspondence to your creditors on your plans to repay the debts as well as the program you may be willing to undertake to restructure your debt repayment plan. If you feel like you need more time to put your debts in order you may even put in a request for an extension of time. You may also have to know whether your creditor has violated any laws by filing a lawsuit against you especially if you have already filed for bankruptcy prior to receiving a summons to appear in court.
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In general you may need to know your rights as a debtor and the steps you may need to take if you are served with a summons from your credit card providers. Credit card lawsuits rarely make it to court as many creditors prefer to settle things out of court just as much as you do. Basically you may also need to understand the relationship between bankruptcy and legal actions taken by your creditors so that you may research the laws and procedures regarding any lawsuit that may or may not be taken against you.
